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Three best friends are shopping online together; image used for HSBC Spending Instalment Plan Article.

How to use a credit card to help manage your finances

Credit cards let you shop, have fun and enjoy a more convenient life. But they can do more than that if you know how to use them wisely. Here's how to use your credit card to manage your budget.

Use it to cover daily necessities

Sure, a credit card can help you get what want. But you can also use it for what you need. Using a credit card to cover things like utility bills or basic necessities can earn you extra credit card points and cash rebates.

It also lets you monitor your spending more easily, because it will group your expenses in your credit statement. Which leads us to the next tip.

Control your monthly spending

Marking down your daily expenses and controlling how you use money are important steps to better finances. If there is a time where you had to spend more than you should, you can consider splitting your credit card bills by instalment to keep a manageable balance every month.

Before you apply for a instalment plan, remember to check its handling fee, interest rate, early settlement fee and such to estimate your repayment ability.

Our Spending Instalment Plan lets you combine several credit card transactions into one instalment plan for a handling fee as low as 0.18% (APR as low as 3.76 %). You can even enjoy a 3-month handling fee rebate when you use the HBSC Spending Instalment plan for purchase of over HKD5,000 at selected merchants. 

If this sounds like it could help you manage your budget, you can apply quickly and easily online

Different spending, different credit cards

To ensure you're able to pay back your credit card in full, it's important to track every dollar you spend with it. One tip to make that easier: if you have multiple credit cards, use a different card for each spending category. For example, one for utility bills and insurance premiums, one for shopping and dining, and one for household. It's an easy way to see how much you spend in different category.

Another way is to set up a automatic alert in an expense tracking app to remind you when you have spent over a certain amount.

Always pay more than the minimum payment amount

No matter if you are paying off your statement in full or by instalment, never only pay the minimum payment amount. Doing that will cost you a lot more in interest and additional charges, and all the new purchases on the same card will be charged at a high interest rate as well. This can create a snowballing effect on your debt, affecting your credit scores and cost of lending in the future.

A credit card doesn't have to be a dangerous thing. Remember our tips and use your cards to manage your budget better.

To borrow or not to borrow? Borrow only if you can repay!